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EXHIBIT 2.1
AMENDMENT TO INITIAL PUBLIC OFFERING AND DISTRIBUTION AGREEMENT
This AMENDMENT ("Amendment") is made and entered into as of July 6,
2000 and amends that certain INITIAL PUBLIC OFFERING AND DISTRIBUTION AGREEMENT
(the "Agreement"), dated as of December 7, 1999, by and among Daisytek
International Corporation, a Delaware corporation ("Daisytek International"),
Daisytek, Incorporated, a Delaware corporation and a wholly-owned subsidiary of
Daisytek International ("Daisytek"), and PFSweb, Inc., a Delaware corporation
and a wholly-owned subsidiary of Daisytek ("PFSweb"). Certain capitalized terms
used herein are defined in Section 1 of the Agreement, as amended herein.
RECITALS
WHEREAS, in connection with the consummation of the Distribution the
parties hereto have agreed to amend and restate certain provisions of the
Agreement;
NOW, THEREFORE, for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the parties hereby agree as follows:
I. Amendment and Restatement. The following Sections of the Agreement
are amended and restated as follows:
(a) The following definitions are added, amended or restated as
follows:
"Daisytek Employee" means an individual employed by Daisytek or any
Daisytek Affiliate prior to the Distribution Date and who thereafter remains
employed by Daisytek or any Daisytek Affiliate as of the Distribution Date.
"Daisytek Option" means an option to purchase shares of Daisytek Common
Stock issued under any stock option plan of Daisytek International or otherwise.
"Replacement Option" means an option, including an Unstapled Option, to
purchase shares of Daisytek Common Stock and/or PFSweb Common Stock issued by
Daisytek International and/or PFSweb pursuant to Section 2.10 below.
"Unstapled Option" means an option to purchase shares of both Daisytek
Common Stock and PFSweb Common Stock (which may be exercised separately) issued
by Daisytek International and PFSweb pursuant to Section 2.10 below.
(b) Section 2.9 of the Agreement is amended and restated to read as
follows:
2.9. Fractional Shares. On or as soon as practicable after the
Distribution Date, Daisytek International shall direct the Daisytek Transfer
Agent to determine the number of whole shares and fractional shares of PFSweb
Common Stock allocable to each holder of record or beneficial
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owner of Daisytek Common Stock as of the Record Date, to aggregate all such
fractional shares and sell the whole shares obtained thereby in open market
transactions at then prevailing trading prices, and to cause to be distributed
to each such holder or for the benefit of each such beneficial owner to which a
fractional share shall be allocable such holder's or owner's ratable share of
the proceeds of such sale, after making appropriate deductions of the amount
required to be withheld for federal income tax purposes and after deducting an
amount equal to all brokerage charges, commissions and transfer taxes attributed
to such sale. Daisytek International and the Daisytek Transfer Agent may
aggregate the shares of Daisytek Common Stock that may be held by any beneficial
owner thereof through more than one account in determining the fractional share
allocable to such beneficial owner.
(c) Section 2.10 of the Agreement is amended and restated as follows:
2.10. Replacement of Daisytek Options. As of the Distribution Date,
each outstanding Daisytek Option shall be adjusted and replaced as follows:
(a) Daisytek Options held by PFSweb Employees will be adjusted and
replaced with either (at the holder's election, in accordance with such election
procedures as shall be established by PFSweb) options to acquire shares of
PFSweb Common Stock and/or Unstapled Options. Daisytek Options held by Daisytek
Employees will be adjusted and replaced with either (at the holder's election,
in accordance with such election procedures as shall be established by Daisytek
International) options to acquire shares of Daisytek Common Stock and/or
Unstapled Options.
(b) All Replacement Options will comply with a formula designed to
ensure that: (1) the aggregate "intrinsic value" (i.e. the difference between
the exercise price of the option and the market price of the common stock
underlying the option) of the Replacement Options will not exceed the aggregate
intrinsic value of the outstanding Daisytek Option which is replaced by such
Replacement Option immediately prior to the Distribution, and (2) the ratio of
the exercise price of each outstanding Daisytek Option and Replacement Option,
respectively, to the market value of the applicable underlying stock immediately
before and after the Distribution is preserved.
(c) Substantially all of the other terms and conditions of each
Replacement Option, including the time or times when, and the manner in which,
each option will be exercisable, the duration of the exercise period, the
permitted method of exercise, settlement and payment, the rules that will apply
in the event of the termination of employment of the employee, the events, if
any, that may give rise to an employee's right to accelerate the vesting or the
time or exercise thereof and the vesting provisions, will be the same as those
of the replaced Daisytek Option, except that option holders who are employed by
one company will be permitted to exercise, and will be subject to all of the
terms and provisions of, options to acquire shares in the other company as if
such holder was an employee of such other company.
(d) Following the Distribution Date each of Daisytek International and
PFSweb shall take all corporate action and make all required filings under
applicable state Blue Sky laws and the Securities Act to register or qualify the
Replacement Options issued by it and/or the underlying shares thereof so that
the shares acquired upon exercise thereof are freely tradable under the
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Securities Act, except for shares acquired by affiliates (as defined in the
Securities Act), and each applicable state's Blue Sky laws.
(e) As soon as practicable following the Distribution Date, Daisytek
International and PFSweb shall jointly prepare a schedule of all Replacement
Options which shall be deemed issued and outstanding as of the Distribution Date
for all purposes.
II. Ratification of Distribution. Each of the parties hereto ratify and
confirm the Distribution and acknowledge that all of the conditions precedent
thereto are, as of the date hereof, satisfied and/or waived.
III. No Further Changes. Except as otherwise set forth herein, all of
the terms and provisions of the Agreement remain in full force and effect in
accordance with the terms of the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date and year first written above.
DAISYTEK INTERNATIONAL CORPORATION
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive Officer
DAISYTEK, INCORPORATED
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: President
PFSWEB, INC.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: President and Chief Executive Officer
